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  1. Politics
16 June 2010

Why poverty really is relative

Frank Field is wrong to claim that we need to change our definition of poverty.

By Imran Hussain

The Labour MP Frank Field, who is leading a government-commissioned independent review of poverty, has said that he will examine how poverty is measured. This matters because measuring child poverty is crucial to understanding and tackling it.

There are a few myths that need dispelling about the targets in the Child Poverty Act:

1. The government target is a relative poverty target that takes no account of other factors. Wrong. The Child Poverty Act contains four targets: relative low income, absolute low income, persistent low income and material deprivation. This basket of measures picks up a range of factors crucial to ensuring that children’s lives and well-being are improved.

2. The relative low income target is mathematically impossible to meet. Wrong. Unfortunately, in an article for the Telegraph, Frank Field, the former head of the Child Poverty Action Group, confused the mean and the median. Relative low income is set at 60 per cent of median income. Yes, this creates a moving target when incomes rise (and sometimes fall). But it is still mathematically possible for every household to be moved from below 60 per cent of the median to above without the median moving: if every household below 60 per cent moved to the range between 60 per cent and 100 per cent, then the median would not move at all. It is only when incomes increase above 100 per cent that the median shifts.

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3. No developed world country has achieved the relative low income target. Wrong. Finland, Denmark and Sweden are all, or have recently been, in a situation of less than 10 per cent of households with children below the 60 per cent median income — the standard set by the Child Poverty Act for 2020.

4. The 60 per cent median income line is arbitrary. Wrong. This is the accepted international measure used in the OECD and the EU. In fact, the previous government gave long consideration to where to set the line, including consulting with expert organisations. The 60 per cent line was chosen because, for incomes at this level, a clear correlation with material deprivation has emerged. As there are already clear signs of correlation with material deprivation at 70 per cent of median income, it could be argued that a more ambitious anti-poverty strategy would have defined poverty at income below 70 per cent of median earnings.

5. Relative poverty is not poverty. Wrong. No child should be left behind. A paper last year from the right-wing think tank Policy Exchange, by Peter Saunders, argued that the dictionary definition of “poverty” does not include relative poverty. The paper even quoted the Oxford English Dictionary to try to prove that poverty really means destitution only. Curiously, the quotation omitted the line “relative lack of money or material possessions”. Go check — it’s there!

6. The relative poverty target can only be met by raising benefits to unaffordable levels. Wrong. Many people on benefits do not have sufficient incomes and raising benefits must be a part of the long-term strategy. However, six out of ten children below the poverty line are in homes where a parent has a job. This is not just about redistribution to benefit claimants; it is about making work pay and ensuring public services help improve the life chances of children.

7. It is poverty of ambition that is the problem. Half wrong. Children who grow up below the poverty line start out with ambitions very similar to wealthy children. It is only when they get older that their ambitions are scaled back. Certainly their ambition needs to be nurtured, but it is hard when the real problem is lack of opportunity because of socio-economic disadvantage. These kids need more than a pep talk, they need equal opportunity.

Returning to dodgy definitions of poverty, the idea that relative poverty is not “real” poverty is often made by a vocal minority. But arguing over the correct definition of a word is beside the point. It is well understood by anti-poverty campaigners that the public more readily associates “poverty” with the horrific images on TV of destitution in the developing world. What matters most is another “p” word: problem.

Does the public see high levels of economic inequality in the UK as a problem? Yes. Is the public concerned at the high social and economic costs resulting from high levels of economic inequality? Yes. Does the public believe that politicians should do something about the fact that the poorest UK children are likely to live ten years less than the wealthiest? Are twice as likely to die in infancy? Twice as likely to acquire a disability during life? Much more likely to leave school with low skills and qualifications? Yes, yes, yes and yes!

Many members of the public may associate “poverty” with the situation of destitute children in the developing world rather than with the UK. But that doesn’t mean they’ve stopped believing in tackling problems resulting from social and economic inequalities in our own country. The public cares. People don’t want to live in a rat-race society of grotesque inequality. They want a fair resolution to inequality that produces a better quality of life for all.

The confused objections to the current measures and targets are at best worrying. At worst, by diluting how we measure child poverty and thereby making the government less accountable for tackling it, these calls are dangerous and could have a real impact on the childhood and the life chances of youngsters living in poverty.

That really would be thinking the unthinkable.

Imran Hussain is head of policy at the Child Poverty Action Group.

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